Digital Media M&A Update, Q4 2017

February 14, 2018 – Solganick & Co. has issued its latest M&A update for the digital media sector which covers recent transactions in the sector for Q4 2017 and an outlook for 2018. The following summarizes the report:

Digital Media M&A

  • M&A activity in the digital media sector during 2017 remained strong when compared to total M&A activity, led by eCommerce platforms.
  • In the marketing, media, and technology industries, digital media/commerce was the most active segment for M&A in 2017, with 1,319 deals and a total deal value of $92.5 billion. Digital media/eCommerce was also the most active segment during Q4, with 438 investments or transactions totaling $45.2 billion and 60% of aggregate reported deal value.
  • Within the digital media sector, eCommerce was the most active subsegment during Q4. For this subsegment, deal number dropped 13% when compared to Q4 2016, but deal value increased by 18%. eCommerce was followed, in order, by mobile content, digital marketplace, social media, gaming, niche content, and other.
  • 2017 recorded the announcement of numerous billion-dollar deals, including Discovery-Scripps, Disney-Fox, and Meredith-Time. These megadeals should force smaller media players such a Viacom, Lionsgate, and MGM to look for consolidation opportunities.

 

U.S. M&A

  • United States M&A activity during the fourth quarter of 2017 decreased 29.7% on that achieved in 2016. This is because there were 170 fewer deals in Q4 2017 than in Q4 2016. The U.S. accounted for 40.2% of global M&A deal value, the lowest percentage since 2013.
  • United States deal value for Q4 2017 rose to $352.8 billion from $294.3 billion in Q3 2017

 

Digital Media 2018 M&A Outlook

Increased Sell-Side Interest: The percentage of digital media related companies that expect to explore a sale of their company in 2018 increased to 61%, up from 47% in 2017.

Decreased Buy-Side Interest: The percentage of digital media related companies that expect to explore an acquisition target in 2018 decreased to 49%, down from 68% in 2017.

Most Sought Areas of Expansion: Consistent with prior years, analytics, social/mobile marketing, and design/user experience were the most sought-after areas of expansion for digital media related companies.

No End in Sight: Only 17% of digital media related firms believe that the mergers and acquisitions market has peaked.

Overall, we expect the digital media industry to continue to announce a number of key strategic and financial M&A transactions for 2018.

You can access the complete report here: Digital Media M&A Update Q4 2017 and 2018 Outlook

 

Solganick & Co. is a boutique investment bank and M&A advisory firm focused exclusively on technology and digital media companies globally.  For more information on this report or the current digital media M&A environment, please contact us.

 

Posted in Digital Media M&A, Quarterly Update, Sector Analysis.